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Case Digest
JOSE LAMADRID, President, respondents.
[G.R. No. 159890 May 28, 2004]

FACTS: Petitioner was a salesman of respondent company earning a commission of 3% of the

total paid up sales covering the whole area of Mindanao. Aside from selling, he was also tasked
with collection. Respondent corporation through its president, often required Abante to report to
a particular area and occasionally required him to go to Manila to attend conferences.

Later on, bad blood ensued between the parties due to some bad accounts that Lamadrid
forced petitioner to cover. Later petitioner found out that respondent had informed his customers
not to deal with petitioner since it no longer recognized him as a commission salesman.
Petitioner filed a complaint for illegal dismissal with money claims against respondent company
and its president, Jose Lamadrid.

By way of defense, respondents countered that petitioner was not its employee but a freelance
salesman on commission basis.

ISSUE: Whether or not petitioner, as a commission salesman, is an employee of respondent


HELD: To determine the existence of an employee-employer relationship, we apply the four fold
test: 1) the manner of selection and engagement; (2) the payment of wages; (3) the presence or
absence of the power of dismissal; and (4) the presence or absence of the power of control.

Applying the aforementioned test, an employer-employee relationship is notably absent in this

case. It is true that he was paid in commission yet no quota was imposed therefore a dismal
performance would not warrant a ground for dismissal. There was no specific office hours he
was required to observe. He was not designated to conduct services at a particular area or time.
He pursued his selling without interference or supervision from the company. The company did
not prescribe the manner of selling merchandise. While he was sometimes required to report to
Manila, these were only intended to guide him. Moreover, petitioner was free to offer his
services to other companies.

Art. 280 is not a crucial factor because it only determines two kinds of employees. It doen;t
apply where there is no employer-employee relationship. While the term commission under
Article 96 of the LC was construed as being included in the term “wage”, there is no categorical
pronouncement that the payment of commission is conclusive proof of the existence of an
employee-employer relationship.

The decision of the CA is affirmed.